Fly north: Northern Australian prospects attract mining’s biggest names

Mining companies big and small are joining forces and digging into the underexplored regions of northern Australia. Vanessa Zhou speaks with three emerging companies about their prospects.

Northern Australia is laden with prospects, with mining companies of all sizes flocking to the region in the past decade.

Copper, gold, cobalt and zinc are just some of the commodities that are being sought by a line of key and emerging mining players. Newmont Goldcorp, Newcrest Mining, Rio Tinto, South32 and OZ Minerals are some of the leading miners building their presence in the area.

These mining majors are linking up their capabilities with smaller counterparts already in the region, demonstrating the considerable potential to unearth the next major discovery in northern Australia.

For Prodigy Gold managing director Matt Briggs, the prospects of the Tanami region proved appealing enough to convince him to depart Gold Fields after 14 years to pursue what he calls ‘a huge opportunity’.

The geologist started looking at the Tanami region about three years prior to joining Prodigy Gold when he was Gold Fields’ head of strategic planning. He realised the area had been underexplored for the past 20 years to that point.

“That’s why you’re getting companies with the calibre of Newcrest and Newmont coming in to do joint ventures with us, and that’s why St Barbara came to take an equity with us,” Briggs tells Australian Mining.

“They see that massive potential for discovery. Those companies are looking for large provinces that are underexplored to find Australia’s next generation of gold mines. That’s why we’re all in that province.”

Prodigy Gold holds an earn-in agreement with Gladiator Resources over the North Arunta (otherwise known as the Barrow Creek) project, which has several known mineral occurrences, including gold, copper, nickel, zinc, tin and tantalum.

It also has a farm-in agreement with Newcrest at the Euro gold project and a JV with Newmont Exploration at the Tobruk project. All three agreements are in the Northern Territory.

These developments add to Prodigy’s existing joint venture with one of its major shareholders, Independence Group (IGO), at the Lake Mackay project northwest of Alice Springs.

“I joined the company a few years ago. Our strategy was to go for the best target in the Tanami region and keep it 100 per cent to self-fund, then do JVs with the right calibre of partners on other areas that were more challenging to explore, so we could progress them and make the discoveries on the ground,” Briggs says.

“We have three rights on the ground drilling at the moment (as of May 20). There should be a fourth one joining the program in the next couple of weeks. I know Newmont is very keen to go out and do some diamond drilling, so there could be five rigs out there within the next month or so drilling.”

Prodigy has executed a number of exploration agreements over the past 12 months, which will lead to $30 million worth of funding going into the ground.

This investment goes on top of Prodigy’s own spending at its 100 per cent owned projects, totalling one million ounces of resources at two grams a tonne of gold in the Tanami province.

Still, the junior explorer aims to lock another deal in prior to the end of 2019 to keep its portfolio moving. This one is also reserved for the Tanami region.

“We’re out there, all to find the next world-class discovery – by that, at least two million ounces, if not five. And we’ve got our rigs out there to make that discovery,” Briggs says.

“But what’s most exciting for us in the Northern Territory in the short-term is our JV with IGO, which is base metals, gold and battery metals. I think this is the biggest trigger for value in our company in the short-term.

“There’s massive drilling there for 63 targets. IGO is very positive about it. They think the project looks like a battery cathode sticking out of the ground – that’s how they’ve described it.”

Briggs’ sentiment on the prospects in northern Australia are echoed by Encounter Resources managing director Will Robinson, who believes the Tanami, Paterson and West Arunta mining provinces will provide the next wave of mineral discoveries in Australia.

While the last decade of exploration has been largely focused on a number of bulk commodities such as coal and iron ore, Robinson is optimistic that the next wave of discoveries will involve nickel, copper, cobalt, zinc and gold.

Prodigy has formed JVs with the likes of Newcrest Mining and Newmont.

A number of the ageing gold mines have diminished, with most companies operating in that space “scouring the world for acquisition opportunities”, Robinson explains.

“In reality, the good mines in those sectors are not for sale, and if you want to have a good operating mine in those commodities, you need to get up there and find it yourself,” he says.

While the Tanami has attracted Newmont Goldcorp and Newcrest, the Paterson is also receiving its own elite audience, such as Fortescue Metals Group and Rio Tinto.

Encounter’s focus is centred on the prospective regions in northern Australia that cover highly prospective geology showing potential to deliver Tier 1 orebodies.

This ambition brought Encounter to the Paterson region, where it’s been operating since 2010, and also to the Tanami and West Arunta via five separate JVs with Newcrest.

“The logic is pretty clear. You’ve got prospective geology that’s delivered Tier 1 mines,” Robinson says.

“Therefore, we’re continually and aggressively pursuing new projects to bring into the pipeline. We’ve got very large exploration programs set up for the next couple of years and doing what the industry’s about to embark on, which is the renaissance in greenfield exploration.

“This year will be our busiest on-ground year that we’ve had since we were listed – via partnerships with Newcrest in the Tanami and West Arunta, and with IGO in the Paterson, as well as the work we’re doing under our own steam in the Paterson.”

The Northern Territory’s potential for a battery minerals deposit is also developing at TNG’s Mount Peake project, which is “unquestionably” one of the world’s premier vanadium development assets, according to company managing director Paul Burton.

Mount Peake, which is in “one of the world’s most stable and supportive jurisdictions”, is a large, long-life project with outstanding economic fundamentals.

The operation has evolved into a multi-commodity project and processing facility, encompassing vanadium, titanium and iron products, which will effectively form three separate business units.

“(TNG) has an outstanding list of strategic development partners, having secured binding offtake agreements and terms for all of its products with a group of blue-chip customers in our various commodity areas,” Burton tells Australian Mining.

“It is important to mention that the company has been receiving great support from the NT Government and regulatory bodies, and they have shown strong commitment to the Mount Peake project as they believe it will deliver significant economic and social benefits across the NT.

“The board and management see Mount Peake project ideally placed to become a ‘new-generation’ vanadium mine – poised to meet the demand for vanadium globally to increase steel strength, as well as from the new energy storage and grid-scale battery sectors.”

Mount Peake is close to existing key power and transport infrastructure, including the Alice Springs-Darwin Railway, Stuart Highway, Amadeus Gas pipeline hub, Darwin power plant and Darwin port, further reinforcing northern Australia’s readiness to power up mineral discoveries for generations to come.

The myriad exploration programs run by Prodigy, Encounter and TNG are just a precursor to a potential major discovery in northern Australia. The industry will watch with keen eyes for what the region unearths.

This article also appears in the July edition of Australian Mining.

The post Fly north: Northern Australian prospects attract mining’s biggest names appeared first on Australian Mining.

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